Contact:†
Mary Beth Fisher

For
Immediate Release

November
6, 2002

IURC
ADJUSTS RATE REQUEST OF INDIANA AMERICAN

Today,
the Indiana Utility Regulatory Commission approved a rate adjustment for
customers of Indiana American Water.

In
Cause No. 42029, the Commissioners authorize a two-step process; determining
that the third step proposed by the company is not necessary.† Overall, the company is allowed to increase
rates 3.97% in Step 1 and 6.10% in Step 2.†
The increase approved by the Commissioners is significantly less than
the company wanted, and in some areas of the state there is actually a rate
decrease.† The adjustment of the
increase is due to the IURCís denial of acquisition premiums the company
requested for its purchase of Northwest, United, Cementville, the Peoples Water
Company, and Shorewood Forest Utilities.

Group 2: Crawfordsville, Johnson County,
Noblesville, and Southern Indiana.

Group 3: Newburgh and Shelbyville.

Wabash

14.94%

0.00%

Total Sewer

50.83%

0.00%

Northwest

18.11%

20.20%

Mooresville

7.57%

0.00%

Warsaw

-2.24%

0.00%

West Lafayette

-3.08%

0.00%

Winchester

24.02%

0.00%

Testimony
before the Commission confirmed that the existing tunnel in Northwest Indiana
is near the end of its remaining service life and should be replaced.† The project entails the replacement of the
water intake tunnel that supplies the Borman Park Treatment Plant, which was
built in 1908. The new rate calculation for customers in Step 1 and Step 2 for
Northwest Indiana reflects the cost of the proposed tunnel project.† The Step 2 increase is subject to refund, if
the actual project costs are less than expected.

Sewer
customers will see the largest increase. To ease the burden, the Commission has
ordered the rate adjustment to be phased in.

The
widespread complaints regarding water quality the IURC heard in field hearings
across the state cannot be ignored.† As
a part of this order Indiana American is directed to identify the water quality
problems in each area, the corrective measures that need to be taken, and
submit an implementation plan to the Commission within 90-days of this order.

†

Indiana
American provides water utility service to approximately 264,000 customers in
21 Indiana counties.† Its corporate
office is located in Greenwood, Indiana.†
Indiana American also provides public and private fire service, and
sewer utility service in Wabash, and Delaware Counties in Indiana.